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August 16, 2010 Dear Friend, · Next Friday August 20th the World Steel Assn. will report global steel output and the Int’l Aluminum Institute global aluminum output. The WBMS should publish June nonferrous demand-supply data on Aug. 18th. The World Gold Council should publish second-quarter gold demand trends this coming week too.· Signs of China slowness included the July steel and aluminum output drops, the July import drop to force a larger trade surplus, the August 12th yuan weakening and the August 6th and 13th Shanghai inventory gains.· This past week combined commodity exchange copper inventories ROSE by 1,407 tonnes, zinc rose by 2,796 and lead rose by 2,275 tonnes while aluminum FELL 18,246, nickel fell 336 and tin fell 1,170 tonnes. The four-week inventory changes moving average ROSE for lead to a 819 tonne rise, while remaining at very slim declines for al, ni and zn and larger declines of 6,928 tonnes for copper and 541 tonnes for tin. The inventories no longer are “falling like a rock” in total, but such results are above-average for August. · “Shallow is good.” Remember, copper stocks rose for 32 of 33 weeks to the end of February 2010 to total a 427,000 or 13,000 tonne weekly buildup. It started in week #29 in July 2009, and August 2010 had a small buildup of 1,417 tonnes in week #33. Copper may rally if weekly buildups are < 5,000 t. * Most nonferrous metals prices fell by 2%-4% this past week except for gold, uranium and moly. Recession fears widened.
Faithfully
John C. Tumazos, CFA
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Copyright © 2008 John Tumazos Very Independent Research,
LLC
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